Row 88505

Row ID: 88505 | Dataset Entry | Axioma AXP Content Repository

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This page contains data entry 88505 from the Axioma AXP content repository. The structured data below represents the complete record for this entry.

For market cap to equal capital that has entered the market measured in dollars, you need 100% liquidity in the market. That means any and all bitcoin, to use bitcoin as the example, must be for sale at that price. This is obviously not the case.

Quick look at coingecko info: in the past 24 hours 410,562 bitcoin have changed hands. There were 19,705,792 bitcoin in circulation at the time of this post. That means that 24h trade volume was 2% of supply. The moves that determine the market cap for 100% of supply were only 2% of that supply.

Hopefully you get the idea. There are various methods that you can use to get an estimate of how much capital has entered - exited the market to account for the market cap using those numbers. It is nowhere near the value for each coin. That number divided by total supply is how much you'd get if there was a sudden jump in liquidity to 100%. This can also be used to determine how you expect prices to change as liquidity moves, and how much a purchase can be expected to move the price. My rough calculation based on these numbers, for every $1 net inflow, the market cap moves up by $50, and for every thousand bucks that flows in the price of a bitcoin moves up by 0.0025 dollars, or a quarter of a penny. If market cap were the same as capital in the market, that is, at 100% liquidity, it should be 2% of that.

To summarize, price rise is a function of liquidity and net inflow of capital. Market cap is a simple function, price times supply. If liquidity cuts in half, you'll get a doubling of price with no net increase in capital inflow, and with constant liquidity, you need a doubling of net inflow to double the price. This is all a game of percentages, and looking at moves in nominal terms doesn't actually tell you want you're trying to know.

FieldValue
text For market cap to equal capital that has entered the market measured in dollars, you need 100% liquidity in the market. That means any and all bitcoin, to use bitcoin as the example, must be for sale at that price. This is obviously not the case. Quick look at coingecko info: in the past 24 hours 410,562 bitcoin have changed hands. There were 19,705,792 bitcoin in circulation at the time of this post. That means that 24h trade volume was 2% of supply. The moves that determine the market cap for…
label r/cryptocurrency
dataType comment
communityName r/CryptoCurrency
datetime 2024-05-24
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Raw Record

{
  "text": "For market cap to equal capital that has entered the market measured in dollars, you need 100% liquidity in the market. That means any and all bitcoin, to use bitcoin as the example, must be for sale at that price. This is obviously not the case.\n\nQuick look at coingecko info: in the past 24 hours 410,562 bitcoin have changed hands. There were 19,705,792 bitcoin in circulation at the time of this post. That means that 24h trade volume was 2% of supply. The moves that determine the market cap for 100% of supply were only 2% of that supply.\n\nHopefully you get the idea. There are various methods that you can use to get an estimate of how much capital has entered - exited the market to account for the market cap using those numbers. It is nowhere near the value for each coin. That number divided by total supply is how much you'd get if there was a sudden jump in liquidity to 100%. This can also be used to determine how you expect prices to change as liquidity moves, and how much a purchase can be expected to move the price. My rough calculation based on these numbers, for every $1 net inflow, the market cap moves up by $50, and for every thousand bucks that flows in the price of a bitcoin moves up by 0.0025 dollars, or a quarter of a penny. If market cap were the same as capital in the market, that is, at 100% liquidity, it should be 2% of that.\n\nTo summarize, price rise is a function of liquidity and net inflow of capital. Market cap is a simple function, price times supply. If liquidity cuts in half, you'll get a doubling of price with no net increase in capital inflow, and with constant liquidity, you need a doubling of net inflow to double the price. This is all a game of percentages, and looking at moves in nominal terms doesn't actually tell you want you're trying to know.",
  "label": "r/cryptocurrency",
  "dataType": "comment",
  "communityName": "r/CryptoCurrency",
  "datetime": "2024-05-24",
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}
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